Australian film and TV sector shrinks

Film and TV production in Australia has been growing but the entire sector’s economic contribution has shrunk and employment has fallen, according to a new study.

A report commissioned by the Australian Screen Association shows the film and TV industry’s gross output in 2012-2013 was $21.5 billion, down from $21.7 billion in 2009-2010.

The pay TV sector expanded from $3.6 billion to more than $4.8 billion in that period to become the largest sector by revenue.

While the volume of production grew, free-to-air TV, exhibition, distribution, rental and retail all declined in those three years.

Since 2009-10 the film and TV industry's economic contribution has fallen in real terms by 12.2% from $6.6 billion to $5.8 billion in 2012-13 and employment is 4.2% lower at about 47,000 full-time-equivalent employees (FTE).

Australian Home Entertainment Distributors Association CEO Simon Bush tells IF, “An average decline of 4% over three years in the face of massive piracy and digital disruption is not a terrible result.”

Bush and other members of the Creative Content Group are hopeful that an anti-piracy code being negotiated with the ISPs will be effective. The government has set a deadline of April 10 for the code to be finalised.

On Monday Bush met with Labor Party MPs in Canberra and says, “Labor is being very positive about the processes needed to combat piracy.”

The report by Deloitte Access Economics estimated that on average, the spend on Australian production of features and TV dramas has risen from about $400 million in 2010-11 to $622 million in 2012-13 after peaking at $701 million in 2008-09.

The Australian film and video production and post- production businesses generated $2.7 billion worth of gross output, creating over 13,000 full time positions and a contribution of about $1 billion worth of direct value added.

Free-to-air television generates the greatest share of direct value added as its $4.7 billion of output accounts for over $1.5 billion in direct value added, creating more than 6,600 FTE jobs

Australian film and TV distributors achieved gross output of $2.6 billion, contributing 2,200 FTEs and $660 million of value added to the economy.

Gross output from the exhibition sector was just over $1.7 billion, resulting in over $390 million in direct value added and over 6,100 direct FTEs.

Tracing the decline in the home entertainment rental market, the number of units rented has plummeted from 13.4 million in 2007-08 to about 3.7 million.

The report estimates pay TV revenue has risen by about 8% a year, stating, “Foxtel, the largest industry player, is reporting strong growth, through an increase in the number of subscribers and lower churn rates. In addition, there has been a number of innovations introduced including Foxtel Go, allowing users to stream content on a number of devices including set top boxes, mobiles and tablets.

“These factors have seen a large increase in value added in the sector from about $600 million in the previous report to over $900 million in 2012-13 (in real terms).

“Online purchase and rental of filmed content is also a growing sub-sector of the industry. The actual contribution to the Australian economy is limited as much of the contribution is driven by overseas supply.

“Other sub-sectors of the film and television industry have not experienced similar growth stories to those outlined above. This may be driven by a shift in consumer preference to streaming content including purchasing filmed content. The market is diversifying with the recent entry of Fetch TV and the emergence of subscription video on demand services such as Presto, Stan, Dendy Direct and shortly, Netflix.”